Legal claims defining the scope of protection. Each claim is shown in both the original legal language and a plain English translation.
1. A computer implemented method, comprising: receiving, by a specifically programmed computer, a plurality of loan interest rates by rating category, and default probability data for a plurality of time intervals; receiving, by the specifically programmed computer, a loan amount, a loan term, and a payment schedule; receiving, by the specifically programmed computer, insured floor project savings risk distribution data for an improvement plan for a facility; for each rating category, computing, by the specifically programmed computer, net periodic loan payments for a plurality of confidence levels of project savings based on the insured floor project savings risk distribution data; for each rating category, computing, by the specifically programmed computer, default amounts for the plurality of confidence levels of project savings, based on the net periodic loan payments for such rating category; determining, by the specifically programmed computer, equivalent credit risk relationships based on the default amounts for the plurality of confidence levels of project savings at each rating category; computing, by the specifically programmed computer, a project loan credit rating enhancement for the improvement plan for the facility based on the equivalent credit risk relationships; and analyzing, by the specifically programmed computer, a pricing of an insurance policy based on the project loan credit rating enhancement associated with implementing the improvement plan for the facility.
A computer program analyzes the credit risk of loans tied to facility improvement projects. It takes as input: loan interest rates for different credit rating categories, historical loan default probabilities, loan details (amount, term, payment schedule), and a risk profile of projected savings from a facility improvement plan (e.g., upgrading equipment). The program calculates the loan payments needed for various levels of savings confidence (e.g., 90% chance of meeting savings targets) within each credit rating category. It then estimates potential loan default amounts based on these payments. By comparing default amounts across rating categories for the same savings confidence levels, the program determines how much the improvement plan enhances the loan's credit rating. Finally, it uses this credit enhancement to price an insurance policy that guarantees a minimum return on investment for the facility improvement project.
2. The method of claim 1 , wherein the facility is a power generation plant.
The method for analyzing credit risk, which computes loan payments for confidence levels, estimates default amounts, determines credit enhancement, and prices insurance based on project savings risk distribution data applies to a power generation plant. Instead of generic facilities, this focuses on improvements within power plants and their specific financial risks.
3. The method of claim 1 , wherein the facility is a chemical plant.
The method for analyzing credit risk, which computes loan payments for confidence levels, estimates default amounts, determines credit enhancement, and prices insurance based on project savings risk distribution data applies to a chemical plant. Instead of generic facilities, this focuses on improvements within chemical plants and their specific financial risks.
4. The method of claim 1 , wherein the facility is a refining plant.
The method for analyzing credit risk, which computes loan payments for confidence levels, estimates default amounts, determines credit enhancement, and prices insurance based on project savings risk distribution data applies to a refining plant. Instead of generic facilities, this focuses on improvements within refining plants and their specific financial risks.
5. The method of claim 1 , wherein the facility is a manufacturing plant.
The method for analyzing credit risk, which computes loan payments for confidence levels, estimates default amounts, determines credit enhancement, and prices insurance based on project savings risk distribution data applies to a manufacturing plant. Instead of generic facilities, this focuses on improvements within manufacturing plants and their specific financial risks.
6. A computerized system, comprising: at least one programmed computer, having a non-transient computer tangible readable medium having stored thereon software instructions executable by at least one processor of the computer, wherein the software instructions comprise: code to receive at least the following: i) a plurality of loan interest rates by rating category, ii) default probability data for a plurality of time intervals, iii) a loan amount, iv) a loan term, v) a payment schedule, and vi) insured floor project savings risk distribution data for an improvement plan for a facility; code to, for each rating category, compute net periodic loan payments for a plurality of confidence levels of project savings based on the insured floor project savings risk distribution data; code to, for each rating category, compute default amounts for the plurality of confidence levels of project savings, based on the net periodic loan payments for such rating category; code to determine equivalent credit risk relationships based on the default amounts for the plurality of confidence levels of project savings at each rating category; code to compute a project loan credit rating enhancement for the improvement plan for the facility based on the equivalent credit risk relationships; and code to analyze a pricing of an insurance policy based on the project loan credit rating enhancement associated with implementing the improvement plan for the facility.
A computer system assesses the financial risk of loans linked to facility improvement projects. The system contains software code that receives loan interest rates by credit rating, loan default probabilities over time, loan specifics (amount, term, payment plan), and projected savings risk data from a facility upgrade. For each credit rating, it calculates net loan payments for various confidence levels of achieving savings targets, and then computes potential loan default amounts related to those savings levels. The system determines equivalent credit risk based on these default amounts and computes a credit rating boost for the loan due to the facility upgrade. The software then analyzes the price of an insurance policy that guarantees a minimum savings floor for the project, based on the calculated credit enhancement.
7. The system of claim 6 , wherein the facility is a power generation plant.
The credit rating system, which receives financial information, calculates payments and defaults, computes credit enhancements, and determines insurance policy pricing focuses on power generation plants. Instead of a generic facility, the system is specialized for calculating risks associated with power plant improvements.
8. The system of claim 6 , wherein the facility is a chemical plant.
The credit rating system, which receives financial information, calculates payments and defaults, computes credit enhancements, and determines insurance policy pricing focuses on chemical plants. Instead of a generic facility, the system is specialized for calculating risks associated with chemical plant improvements.
9. The system of claim 6 , wherein the facility is a refining plant.
The credit rating system, which receives financial information, calculates payments and defaults, computes credit enhancements, and determines insurance policy pricing focuses on refining plants. Instead of a generic facility, the system is specialized for calculating risks associated with refining plant improvements.
10. The system of claim 6 , wherein the facility is a manufacturing plant.
The credit rating system, which receives financial information, calculates payments and defaults, computes credit enhancements, and determines insurance policy pricing focuses on manufacturing plants. Instead of a generic facility, the system is specialized for calculating risks associated with manufacturing plant improvements.
11. The method of claim 1 , wherein the method further comprises: computing, by a specifically programmed computer, project improvement distribution data for the improvement plan for the facility; computing, by the specifically programmed computer, an insured floor of savings for the improvement plan for the facility; and computing, by the specifically programmed computer, the insured floor project savings risk distribution data for the improvement plan for the facility based on: i) the insured floor of savings for the improvement plan for the facility and ii) the project improvement distribution data for the improvement plan for the facility.
In addition to analyzing credit risk (computing loan payments for confidence levels, estimating default amounts, determining credit enhancement, and pricing insurance), the method also computes a project improvement distribution, estimating the range of potential savings from the upgrade plan. It calculates an insured floor of savings, representing a guaranteed minimum return on investment. The insured floor project savings risk distribution data, which is used for the main risk analysis, is calculated based on both this insured savings floor and the overall project improvement distribution data. This ensures the insurance policy accounts for the guaranteed minimum savings.
12. The system of claim 6 , wherein the software instructions further comprise: code to compute project improvement distribution data for the improvement plan for the facility; code to compute an insured floor of savings for the improvement plan for the facility; and code to compute the insured floor project savings risk distribution data for the improvement plan for the facility based on: i) the insured floor of savings for the improvement plan for the facility and ii) the project improvement distribution data for the improvement plan for the facility.
In addition to determining financial risk related to credit ratings, this credit rating system also includes software code that calculates project improvement distribution data for the facility improvement plan. Further code computes an insured floor of savings, a guaranteed minimum return. The insured floor project savings risk distribution data, vital for the main risk analysis, is determined from both this insured savings floor and the overall project improvement distribution data. This ensures the system accounts for the guaranteed minimum savings when pricing the insurance.
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August 19, 2014
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